target cost

hello Sir,

hereby I provide you a question from the Kaplan test book.

The predicted selling price for a product has been set at $56 per unit. Mark up on cost is 25% and the material cost for the product is estimated to be $16 before allowing for additional materials to allow a shrinkage for 20% (fro every 10kg go material going in only 8kg comes out).
if labor is the only other cost and 2 hours are needed what is the most the business can pay per hour if the cost gap is to be avoided?

I calculated the target cost by doing this: $56/1.25= $44.8. However, I am struggling to understand why the material cost is $20=($16*10kg)/8kg. Could you provide me some assistant about how the material cost turned out?